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TPR names first DB superfund to meet its expectations to protect savers

Ref: PN21-32

Issued: Tuesday 30 November 2021

The first new defined benefit consolidation vehicle (DB superfund) to have met tough standards of governance and administration set out by The Pensions Regulator (TPR) to protect savers has been added to a new online list.

The list includes any superfund which has been assessed by TPR and which has demonstrated, through robust evidence, that it meets several criteria, including good governance, being run by fit and proper people and that it is backed by adequate capital.

Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “We welcome the first addition to our online list of DB superfunds. The list shows where superfunds have met our expectations and is a vital tool for trustees and employers who may be considering transferring to such a scheme.

“We are determined to protect savers and so potential customers of a superfund on our list can have the confidence that the scheme has been through a rigorous assessment process to show they are fit for purpose. It is vital however, that trustees and employers still carry out their own thorough due diligence to ensure they are confident a superfund is the right option for their particular scheme and members, and only consider a superfund which is on our list. We expect employers considering a superfund to come to us for clearance.”

TPR launched its interim regime for superfunds and other new models in June 2020, ahead of proposed government legislation. In October 2020, TPR then published guidance for trustees and employers considering a transfer to a superfund.

Superfunds can ask TPR to assess them and if they meet TPR’s expectations, they will be added to TPR’s list.

Notes for editors

  • Superfunds (and other models) will involve the replacement of a DB scheme’s sponsoring employer with a capital-backed vehicle or a Special Purpose Vehicle (SPV).
  • The vehicles seeking to consolidate existing DB schemes, and create a large retirement savings fund, are likely to be capital-backed. In applying the framework to SPVs, TPR is also being clear about how the regime will apply to new models, including those posing risks where they seek to continue with a pension scheme even when its employer has entered insolvency.
  • Superfunds are vehicles for the transfer of members of DB schemes. Participating employers are no longer liable for member benefits following the transfer when one for these conditions applies:
    • the employer is replaced by an employer who is a SPV, preserving the scheme’s PPF eligibility; or
    • the liability of the employer to fund the scheme’s liabilities is replaced by an employer backed with a capital injection to a capital buffer (generally created by from investor capital and contribution from the original employers)
  • Employer severance is still a ‘Type A event’ under TPR’s clearance guidance and nothing in this guidance affects TPR’s ability to use its anti-avoidance powers.
  • In October 2020, TPR published new guidance for trustees and sponsoring employers of defined benefit (DB) pension schemes considering transferring to a DB superfund.
  • The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).

Press contacts

Matt Adams

Senior Media and Parliamentary Manager
01273 662086

David Morley

Media Officer (DB)
01273 662091

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